Sign of the Times: Thomson Sells Its Law School Publishing Business

In the mid-1990s, Thomson made the prescient decision to divest its sizable newspaper business, which was one of the foundations of its information business.  Thomson again seems to have made the right call with its recent divestiture of its law school publishing business.  Capturing the hearts and minds of law school students was long viewed by Thomson and rival LexisNexis as important in future sales to those same people after they became practicing lawyers.  But times are changing.  Law school applications in the US have fallen nearly 40 percent since 2010, according to the American Bar Association.  At the same time, the legal profession is re-examining its educational system and considering some of the biggest changes in a century, such as reducing in-school education and creating new para-professional roles to handle some legal procedures.  (This move is similar to healthcare’s growing use of nurse practitioners to handle some medical care that used to be the sole responsibility of physicians.)  These changes are likely to result in fewer students for case books, study guides, and other products.  Thomson will still have its WestlawNext online research platform to offer law schools, but Thomson’s move reflects changes in the way that law firms purchase information services, as decision-making shifts over time from individual lawyers to professional managers responsible for running firms as businesses.  These professional managers, including chief financial officers, chief administrative officers, chief operating officers, and librarians, are typically willing to trade off individual lawyers’ preferences for less expensive products (or deep discounts from vendors).  This trend toward professional management has been accelerated by cost-cutting pressure on law firms, which started with the 2007 recession.  Another trend associated with professional management has been the growing importance of systems to help firms manage key business functions, such as client development, case management, and billing.   Through acquisitions, Thomson Legal and LexisNexis have become the largest vendors of these business management systems, thereby reducing the relative importance of their traditional online research services and the influence of individual lawyers who used to select such services.  All of this brings us back to where we started:  that law students’ loyalty has diminishing value in winning future law firm business.

About Lee Greenhouse

Longtime strategy consultant focused on the business of information content, applications, and services.
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